FMCG Monitor November 2018

Veggie granules benefit from the Vu Lan season

Key market highlights in November 2018 issues:

Key Indicators

Prospects for Vietnam economy are looking bright with a high GDP growth rate and a well-controlled CPI. Furthermore, the domestic demand also posts a stronger growth compared to the same period last year and is forecasted to speed up in the last months of the year.

FMCG Growth

The FMCG market shows minor movements in the short term. In Urban, the market growth is driven by the increase of average paid price while the market in Rural retains a healthy growth in volume consumption.

The Urban market growth is lagging behind that of Rural mainly due to the volume decline of Dairy and Beverages sector. Meanwhile, Dairy in Rural gains back its momentum and becomes the fastest growing sector. The other sectors are also seeing good performance in Rural areas.

Hot Category

While FMCG growth is stagnant in Urban 4 cities, Veggie granules enjoy a more impressive performance by reaching more buyers. The segment growth is mainly attributable to the Vu Lan season, which is clear to see in Ho Chi Minh city but less so in Hanoi. This indicates a difference in cooking habits between the two cities. Therefore, a regional segmentation with consumer understanding is needed in order to identify growth opportunities from this kind of seasonal occasions. 

Retail Landscape

Minimarkets, convenience stores and online channel still lead the way in terms of growth, which rides the modern shopping wave among Urban citizens. Beside that, hypermarket & supermarket also maintain a steady growth with the acceleration of hypermarket. In Rural, more shoppers move to shop in medium-sized street shops and modern channels, implying high potential to invest further.

Spotlight of the Month – Tea & Coffee shop industry: A vibrant yet competitive market

According to our study about Vietnamese expenditure, consumers tend to spend more on eating and drinking out, showing the promise of F&B service sector. As such, within tea & coffee shop market, we witness a lot of new entrants and store openings from both domestic and foreign players, which not only make the market more exciting but also boost the development of out-of-home consumption.

Urban 4 cities include Ho Chi Minh, Ha Noi, Da Nang and Can Tho.

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